DiamondCorp Up for Sale or Merger

London: DiamondCorp opened itself to a merger or takeover after saying the London-based company urgently needs about $615,623 (GBP 500,000) to address immediate funding requirements.

The board said the company should conduct a strategic review while continuing discussions to secure funding. DiamondCorp’s options include a “merger with or offer for the group by a third party or a sale of the group’s businesses,” according to the company.

“The board intends to pursue any such possible alternatives to ensure the best outcome for its shareholders,” the company added. Panmure Gordon is advising the miner.

On October 13, DiamondCorp said the South African Department of Mineral Resources had shut down underground operations at the company’s Lace diamond mine after a fire. On October 14, a third party with whom the company had been discussing a convertible debt facility withdrew because of “adverse” movement in DiamondCorp’s share price. Shares have plummeted around 40 percent on the London Stock Exchange’s Alternative Investment Market over the past month.

While the company has accelerated discussions with certain shareholders and third parties to secure funding, it warned the group may not be able to continue trading as a going concern in the “very near term” if the discussions are not resolved successfully.

On October 18, the miner said the shutdown at the Lace deposit had been lifted and the financial impact of the four-day closure was minimized by a rescheduling of program maintenance.